Equity targets youth in new growth drive

Equity targets youth in new growth drive

Thursday, October 10, 2019 21:57

By CONSTANT MUNDA

Equity chief executive James Mwangi. FILE PHOTO | NMG

Equity Group #ticker:EQTY has enhanced its funding proposition to cater for the changing needs of its dominantly youthful clientele as it sets sights on hitting the Sh1 trillion mark in assets base in the next few years.

Chief executive James Mwangi says the needs of its customers have changed to include technology-driven value addition.

“What we have done is to enhance (our offering)…This generation is about driving the fourth industrial revolution (which is shaped by disruptive technologies),” Mr Mwangi said in a video interview posted on the bank’s social media platforms this week.

“They want to be in value addition; they don’t just want to produce food crops. They want to process agricultural produce. They don’t want to export raw materials, they want to export finished products. They want to be in cutting-edge technology, and that’s what we want to include in our aspiration.”

Equity, the second largest bank by assets after KCB Group, entered into buyout deals earlier in the year which will spread its wings in Tanzania, Rwanda and DRC, and expand to Zambia and Mozambique upon completion.

The agreement, subject to regulatory approvals, will also see it get 62 percent of the share capital of Banque Populaire du Rwanda.

Equity in September further inked a deal for a controlling stake in Commercial Bank of Congo (BCDC) subject to approvals, consolidating its presence in the minerals-rich nation where it already operates a profit-making subsidiary.

“In banking, size is becoming relevant because margins have collapsed. It’s no longer about margins, it’s about volumes. Technology is becoming a major component in driving banking and the unit cost of technology and risk management needs to be spread over huge customer base,” Dr Mwangi said.

“That explains why we are acquiring the Atlas Mara and BCDC, and hopefully five banks in one go will give us a shoulder ahead of any other bank in the region.”

The lender’s assets were valued at Sh638.66 billion, a growth of nearly Sh96.65 billion over a year earlier. It is second to KCB whose balance sheet expanded Sh78.84 billion, or 11.81 percent, to Sh746.52 billion in June compared with a year before.

“When we have nine countries reporting to Nairobi, it means that hopefully by end of the year, we will have a balance sheet of about $10 billion (about Sh1 trillion),” the lender’s boss said.